At the start of 2014, the Islamic State shocked the world by capturing Fallujah, Iraq, from the Iraqi government. Halfway through the year, the spotlight remains on the Islamic State, which has managed to take control of half of Iraq, forming a Caliphate that stretches from ar-Raqqah, in Syria, to Mosul in Iraq. On the sidelines of these gains is Iraqi Kurdistan, which has also gained ground in 2014 that, while not as vast as the land taken by the Islamic State, is at least as significant. Both the Islamic State and Iraqi Kurdistan are two independent pieces of the Iraqi puzzle that are contributing to the ultimate dissolution of the state.

Kurdish Role in Iraq: The Kurds have made no secret of their desire to be free of the central government of Baghdad, be it run by Sunnis or Shias. For several decades now, they have governed northern portions of Iraq by themselves, even flying their own flag over government buildings rather than the Iraqi one. After the defeat of Saddam Hussein in 2003 by the United States, the three major groups in Iraq – Shia, Sunni, Kurd – all were vying for power. An informal agreement was struck that affords the role of the presidency to a Kurd, the speaker to a Sunni, and the prime minister position to a Shia, a nod to each group’s vital position in the country, even the Kurds who have a far smaller population that the other two.

Oil Deals: Though (until recently) generally content with its semi-autonomous status, the Kurdistan Regional Government (KRG), the body that represents Iraqi Kurdistan, has long butted heads with Baghdad over the subject of oil. Legal battles have been frequent. Baghdad has threatened legal action should the KRG pipe oil to Turkey under the terms of a contract reached between the KRG and Turkey that excluded the Iraqi government. Likewise, following the decision by Baghdad to freeze Kurdistan’s budget over the latter’s oil deal with Turkey, the KRG has threatened legal action against any buyers of the country’s oil. The rows – pardon the impending pun – continue over tankers carrying Kurdish oil apparently seeking to offload their cargo at foreign ports. The KRG contends that such oil transfers are legitimate under the Iraqi constitution while the Iraqi government claims precisely the opposite. Other than hope its pleas are answered, however, there is not much Baghdad can do to stop the KRG from exporting oil, and the Kurds know this.

At the same time, the domestic atmosphere is ripe for exploitation. Amid the Islamic State’s takeover of Mosul, Kurdish Peshmerga soldiers seized the opportunity to grab oil-rich Kirkuk, sometimes referred to as Kurdistan’s Jerusalem. This move was condemned by the Iraqi military, who deemed it a violation of agreements between Erbil and Baghdad. Given that Iraqi soldiers simply up and quit in the face of the Islamic State’s campaign, those objections are weak. The Peshmerga did advance Kurdish objectives of autonomy – and indeed oil has already starting pumping out of Kirkuk under Kurdish authority – but the Peshmerga also stepped in to fill a power vacuum in the absence of a competent fighting force. Compared to the demoralized Iraqi army, the Peshmerga is disciplined and has proved able to resist the tide of the Islamic State. Christian refugees from Mosul have fled to Erbil’s safety, not to Baghdad’s. Analysts have predicted that now is as good a time for the KRG to declare independence (or at least annex Kirkuk) as any, for the weak central government would not be able to stop it. Conclusion: One or both of those options may be on the KRG’s agenda, despite Kurdish cooperation with the central government in picking new leadership. Compliant with the informal power agreement, the Kurds selected a new president, Fuad Massoum, and the Sunnis have picked the speaker, Salim al-Jabouri. But as all eyes turn to the current prime minister, Nouri al-Maliki, skepticism is rife. Mr. Maliki’s has demonstrated that his sectarian policies are directly responsible for the current chaos in his country. There is no question that a stable, united Iraq cannot be achieved under his leadership. That does not mean, however, that another Shia will be treated by the Sunnis or Kurds as different from Mr. Maliki. The guns will not be dropped just because another Shia, perhaps as sectarian, takes the helm. In light of that, perhaps the Kurds are gambling that their destiny can be paved separate from the rapidly failing Iraqi state.